HBC Corrects Course on Severance Pay After Law Firm and Public Pressure

TORONTO, May 21, 2020 — After Samfiru Tumarkin LLP publicly exposed Hudson’s Bay Company’s controversial decision to shortchange laid-off employees on severance pay, the retailer has reversed its approach. HBC will now issue full severance packages to affected staff, correcting what employment lawyer Lior Samfiru described as an “unconscionable” move.

On April 17, 2020, HBC permanently laid off 94 management and administrative employees, just one day after those employees had agreed to a 25% temporary pay cut due to the COVID-19 pandemic. The severance and termination payments were initially calculated based on the reduced salaries, rather than the employees’ full earnings, leaving them significantly underpaid.

Samfiru Tumarkin LLP brought this practice to light after consulting with multiple affected employees and reviewing the reduced severance offers. This public scrutiny led HBC to issue a May 15 memo announcing it would pay the 25% difference in a lump sum following the employees’ termination dates.

Legal experts condemn initial decision

“We are pleased to see HBC take corrective action and honour their employees’ full severance pay rights,” said Lior Samfiru, partner at Samfiru Tumarkin LLP. “This decision ensures these individuals, who find themselves out of work due to COVID-19, receive the financial support they need during such an uncertain time.”

Samfiru criticized HBC’s original approach as both unethical and contrary to employment law. “HBC’s move was unconscionable,” he told Global News. “A large organization like this cannot plead ignorance—they should know better.”

Why every employee should review severance offers

Samfiru used this case as a reminder for non-unionized employees to have their severance offers reviewed by an employment lawyer before signing any agreements.

“This serves as a reminder to any non-unionized employee to have their severance offer reviewed by an employment lawyer at my firm BEFORE they sign any documentation, to ensure that what they are being offered is fair and takes into account all of the necessary factors. Wrongful dismissals, while extremely common before the coronavirus pandemic, have become endemic in these uncertain times.”

Additional Resources and Related Coverage

For more information about this case and employee severance rights, explore these resources:

• Hudson’s Bay Company severance packages
• Mackenzie Irwin on wrongful dismissal of HBC employee

Related Blogs

• HBC fires employees just one day after pay cut in bid to save on severance
• Hudson’s Bay accused of shorting employees’ severance pay

If you have been laid off or presented with a severance offer, contact Samfiru Tumarkin LLP to ensure your rights are protected.